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Exhibit 10.23
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT made
effective as of the 2 nd
day of March, 2007, between eLoyalty Corporation, a
Delaware corporation (the "Company"), and Kelly D. Conway (the
"Indemnitee").
WHEREAS, it is essential to the
Company and its stockholders to attract and retain qualified and
capable directors, officers, employees, agents and fiduciaries;
WHEREAS, the Certificate of
Incorporation of the Company (the "Certificate of Incorporation")
and the Company’s Bylaws require the Company to indemnify and
advance expenses to its directors and officers to the extent not
prohibited by law;
WHEREAS, historically, basic
protection against undue risk of personal liability of directors
and officers has been provided through insurance coverage affording
reasonable protection at reasonable cost;
WHEREAS, it is presently uncertain
whether, and to what extent, such insurance is or will continue to
be available to the Company at a reasonable cost for the protection
of Indemnitee;
WHEREAS, in recognition of
Indemnitee’s need for protection against personal liability
in order to induce Indemnitee to serve or continue to serve the
Company in an effective manner, and, in the case of directors and
officers, to supplement the Company’s directors’ and
officers’ liability insurance coverage, and in part to
provide Indemnitee with specific contractual assurance that the
protection promised by the Certificate of Incorporation and Bylaws
will be available to Indemnitee (regardless of, among other things,
any amendment to or revocation of the Certificate of Incorporation
and Bylaws or any change in the composition of the Company’s
Board of Directors or any acquisition transaction relating to the
Company), the Company wishes to provide the Indemnitee with the
benefits contemplated by this Agreement; and
WHEREAS, as a result of the
provision of such benefits Indemnitee has agreed to serve or to
continue to serve the Company;
NOW, THEREFORE, the parties hereto
hereby agree as follows:
1. Definitions . The
following terms, as used herein, shall have the following
respective meanings:
(a) Claim : means any
threatened, pending or completed action, suit, arbitration or
proceeding, or any inquiry or investigation, whether brought by or
in the right of the Company or otherwise, that Indemnitee in good
faith believes might lead to the institution of any such action,
suit, arbitration or proceeding, whether civil, criminal,
administrative, investigative or other, or any appeal
therefrom.
(b) D&O Insurance
: means any valid directors’ and officers’ liability
insurance policy maintained by the Company for the benefit of the
Indemnitee.
Kelly D. Conway Indemnification Agreement
Page 1 of 7
(c) Company
Determination : means a determination based on the facts known
at the time, by: (i) a majority vote of a quorum of
disinterested directors of the Company, or (ii) if such a
quorum is not obtainable, or even if obtainable, if a quorum of
disinterested directors of the Company so directs, by independent
legal counsel in a written opinion, or (iii) a majority of the
disinterested stockholders of the Company.
(d) Excluded Claim :
means any payment for Losses or Expenses in connection with any
Claim: (i) based upon or attributable to Indemnitee gaining in
fact any personal profit or advantage to which Indemnitee is not
entitled; or (ii) for the return by Indemnitee of any
remuneration paid to Indemnitee without the previous approval of
the stockholders of the Company which is illegal; or (iii) for
an accounting of profits in fact made from the purchase or sale by
Indemnitee of securities of the Company within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended,
or similar provisions of any state law; or (iv) resulting from
Indemnitee’s knowingly fraudulent, dishonest or willful
misconduct; or (v) the payment of which by the Company under
this Agreement is not permitted by applicable law.
(e) Expenses : means
any reasonable expenses incurred by Indemnitee as a result of a
Claim or Claims by reason of (or arising in part out of)
Indemnifiable Events including, without limitation,
attorneys’ fees and all other costs, expenses and obligations
paid or incurred in connection with investigating, defending, being
a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in any Claim by
reason of (or arising in part out of) any Indemnifiable Event.
(f) Fines : means any
fine, penalty or, with respect to an employee benefit plan, any
excise tax or penalty assessed with respect thereto.
(g) Indemnifiable
Event : means any event or occurrence, occurring prior to, on
or after the date of this Agreement, related to the fact that
Indemnitee is, was or has agreed to serve as, a director or officer
of the Company, or is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation,
partnership, joint venture, employee benefit plan, trust or other
enterprise; provided that the Indemnitee acted in
good faith and in a manner the Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, the Indemnitee had no
reasonable cause to believe his conduct was unlawful.
(h) Judicial
Determination : means a final nonappealable determination of a
court of competent jurisdiction.
(i) Losses : means
any amounts or sums which Indemnitee is or becomes obligated to pay
as a result of a Claim or Claims made against Indemnitee for
Indemnifiable Events including, without limitation, damages,
judgments and sums or amounts paid in settlement of a Claim or
Claims, and Fines.
Kelly D. Conway Indemnification Agreement
Page 2 of 7
2. Basic Indemnification
Agreement . In consideration of, and as an inducement to, the
Indemnitee rendering valuable services to the Company, the Company
agrees that in the event Indemnitee is or becomes a party to or
witness or other participant in, or is threatened to be made a
party to or witness or other participant in, a Claim by reason of (
or arising in part out of) an Indemnifiable Event, the Company will
indemnify Indemnitee to the fullest extent authorized by law,
against any and all Losses and Expenses (including all interest,
assessments and other charges paid or payable in connection with or
in respect of such Losses and Expenses) of such Claim, whether or
not such Claim proceeds to judgment or is settled or otherwise is
brought to a final disposition, subject in each case, to the
further provisions of this Agreement.
3. Limitations on
Indemnification . Notwithstanding the provisions of
Section 2, Indemnitee shall not be indemnified and held
harmless from any Losses or Expenses (a) which have been
determined by Judicial Determination to constitute an Excluded
Claim; (b) to the extent Indemnitee is indemnified by the
Company and has already received payment in full of all such Losses
and Expenses pursuant to the Certificate of Incorporation and
Bylaws, D&O Insurance or otherwise; or (c) other than
pursuant to the last sentence of Section 4(d) or Section 12,
in connection with any claim initiated by Indemnitee, unless such
claim has been authorized by a Company Determination.
4. Indemnification
Procedures .
(a) Promptly after receipt by
Indemnitee of notice of any Claim, Indemnitee shall, if
indemnification with respect thereto may be sought from the Company
under this Agreement, notify the Company of the commencement
thereof; provided , however , that the failure to
give such notice promptly shall not affect or limit the
Company’s obligations with respect to the matters described
in the notice of such Claim, except to the extent that the Company
is materially prejudiced thereby. Indemnitee agrees further not to
make any admission or effect any settlement with respect to such
Claim without the consent of the Company, except any Claim with
respect to which the Indemnitee has undertaken the defense in
accordance with the second to last sentence of
Section 4(d).
(b) If, at the time of the
receipt of such notice, the Company has D&O Insurance in
effect, the Company shall give prompt no
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